Marissa Manufacturing is presented with the following two mutually exclusive projects. The required return for both projects is 20 percent. Year Project M 0 -$ 139,000 1 63,600 2 81,600 3 72,600 4 58,600 Project N -$ 356,000 152,000 181,000 137,000 111,000 a. What is the IRR for each project? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the NPV for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. c. Which, if either, of the projects should the company accept? a. Project M Project N b. Project M Project N c. Accept project % %

Marissa Manufacturing is presented with the following two mutually exclusive projects. The required return for both projects is 20 percent. Year Project M 0 -$ 139,000 1 63,600 2 81,600 3 72,600 4 58,600 Project N -$ 356,000 152,000 181,000 137,000 111,000 a. What is the IRR for each project? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the NPV for each project? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. c. Which, if either, of the projects should the company accept? a. Project M Project N b. Project M Project N c. Accept project % %

Name: Raghubhai Marissa Manufacturing is presented with the following two mu
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Description: Raghubhai Marissa Manufacturing is presented with the following two mutually exclusive projects. The required return for bothprojects is 20 percent.Year0Project M-$ 139,000Project N-$ 356,000123463,600152,00081,600181,00072,60058,600137,000111,000a.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 15P

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